The future of correspondent banking cross border payments
New research explores whether and how technology innovation, in conjunction with policy measures, can improve the process of correspondent banking cross-border payments. The work builds on the empirical validation of existing shortcomings in this area of business by using a questionnaire and industry expert focus group sessions. Having identified the key areas of concern (e.g. cost, transparency, speed), several new network models for cross-border payments are assessed, in terms of their ability to remove existing problems. Among the possible models, some build on distributed ledger technology (DLT) and the use of cryptography, similar to Bitcoin. As a next step, we attempt to design a superior cross-border payment set of processes/network that by its nature will likely deliver a remedy to the current network and process related problems in correspondent banking. Finally, we outline policy recommendations to complement the technical and organisational future design for cross-border payments, in particular with a view to streamlining conduct and transparency rules for payment services at a global level.